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Javelin Case Study | 1985-10-01 | 37.5 KB | 942 lines

PROBSOLVA ~0Copyright (c) 1985 Javelin Software Corporation. S/N 0412345679 Press [F1] for Help. Version E4.69 Diagram view Table view READY &SOLVING A PROBLEM WITH JAVELIN $}*$This case study suggests some of the steps you might take to solve a problem with Javelin. $- Press [Space] to continue - $- or press [F1] for Help - 228K %EXAMPLE} $: JDB Industries ~-As Chief Financial Officer of JDB Industries, ~) you must decide whether to invest in an ~.addition to your factory in Jupiter, Virginia. ~)You need to determine if an investment in ~"1986 will return a profit by 1992. }/$Once you have the information together, you can begin to solve the problem. ~-When you start Javelin, the screen looks like ~.this. The program is empty -- ready for you to build a model. &The Model Settings She ~/You can start by using the Model settings sheet ~.to enter the settings that are appropriate for ~* problem. To see the Model settings sheet, ~&use the Define Settings command. Type: & $/' $D' $S' DEFINE } CLEAR WINDOW PRINT MENU ~MDefine variable, building block, worksheet, graph, macro, time pd., settings. Settings Configuration Printer Time period Macro ... Graph Worksheet Building block Variable DEFINE ~@Create a variable or change its name, period, or other settings. ~KChange model default settings, including dates, default period, and format. FY1985 ends {31 Decemb Year Quarter Month Week Constant Dollar ($) "Default Period Commas Percent End date {September 1986} Fixed decimal Begin date {October 1985} Automatic "Default Time Span "Format Name {} Decimal places {} "Model Settings ~7To save settings and leave settings sheet, press [Esc]. ~/This is the Model settings sheet. Since most of the variabl} $es in this model will be yearly, ~,begin by changing the period to Year. Press: '[PgDn] '[PgDn] Press to select Year: 1985} 1986} Look at ~#setting for Year. When you selected ~,Year as the default period, the triangle ( moved to point to Year. }-$The settings above the default period are for ~,the time span of the model. The default time ~+span should represent the beginning and end ~&dates for most variables in the model. ~/The time span for this model is 1986 - 1992. To ~.enter the time span, first set the begin date: '[PgUp] '1986 Begin date: ~7To save settings and leave settings sheet, press [Esc]. Then enter the end date: '1992 ~ End date: ~7To save settings and leave settings sheet, press [Esc]. Most variables in problem are in dollars. ~.To change the default format, move the cursor to Dollar: Then select it: ~+Finally, set the number of decimals to 0 to ~-show all numbers with 0 decimal places. Type: '[PgUp] $0' $} Decimal places: ~7To save settings and leave settings sheet, press [Esc]. ~/Now that you have defined the settings for this ~-model, leave the Model settings sheet. Press: '[Esc] Diagram view Diagram view READY &Entering Formulas The next step is to enter formulas and data for the variables in the problem. The variables are: Sales Initial investment Operating costs Cash flow Total costs Let's start} $ with the Diagram view and the ~#Formulas view on the screen. In the ~*Formulas view, you can see all formulas in the model at once. ~*To view all formulas in the bottom window, type: & $/' $V' $F' $A' DEFINE } CLEAR WINDOW PRINT MENU ~MDefine variable, building block, worksheet, graph, macro, time pd., settings. Graph Macro Errors Notes Worksheet Quick graph Chart Table Formulas ... Diagram VIEW Show diagram in current window. Branches Roots Formulas ... Show all formulas. ~ Worksheet Quick graph Chart Table Formulas ... Diagram READY Formulas for all variables: ~*Now move the cursor to the Diagram view in ~+the top window. This enables you to see the ~*diagram of each formula as you type it in. ~(Press [F6] to move the cursor to the top window: '[F6] ~*Begin by entering the formula that defines the variabl e$ $} %Cash flow~ ~'Watch the top line of the screen as you type this formula: 'Cash flow=Sales-Total costs-Tax Enter the formula by pressing: Total costs Cash flow Sales Cash flow=Sales-Total costs-Tax Total costs = UNDEFINED Tax = UNDEFINED Sales = UNDEFINED Cash flow=Sales-Total costs-Tax When you ente} $r the formula, the top window ~*shows you the formula in the Diagram view. ~(The bottom window shows all the formulas ~*in the model so far. In the Formulas view, }($you can see that Sales, Total costs, and Tax are undefined. ~ Next we'll enter the formula for $T%a%x%~ ~*Again, watch the top line of the screen as ~'you type the formula for Tax. We'll use ~'the SPELL key to help type the formula. Begin typing the formula: & $} 'tax=.46*( ~+Use the SPELL key to help type Sales. Type: & $s'a'l' $} WAIT Sales READY ~'Javelin spells Sales for you on the top ~&line of the screen. Continue, using th SPELL key again. Type: '-tot WAIT Total costs READY ~#Javelin spells Total costs for you. ~)Complete and enter the formula by typing: & $)' $} Total costs Tax ~ Cash flow Sales Tax=0.46*(Sales-Total costs) WAIT =0.46*(Sales-Total costs) READY ~(After you enter the formula, the Diagram ~*view in the top window changes to show you ~(the new formula. The new formula appears })$in the Formulas view in the bottom window as well. ~&The last formula for this model is the formula for %Total costs~ . Press [Space] }$$and I'll enter this formula for you. Initial investment Total costs Operating costs ~ Cash flow ~FTotal costs=Operating costs + Initial investment@1986; Operating costs WAIT ~!Total costs=Operating costs + Ini Tax=0.46*(Sales-Total costs) Sales = UNDEFINED Operating costs = UNDEFINED ~ Initial investment = UNDEFINED READY &Entering Data ~*When you defined Total costs, you created ~)wo more variables, Initial investment and Operating costs. ~*As you can see in the Formulas view, these ~(new variables and the variable Sales are still undefi} $ned. Before you can calculate ~)results for this model, you need to enter data for these variables. Start by ente} $ring data for %Operating Costs in the Table view. Type: $ $ & $/' $V' $T' DEFINE CLEAR VIEW WINDOW PRINT MENU Select view for current window. Graph Macro Errors Notes Worksheet Quick graph Chart Table Formulas ... Diagram VIEW ~&Show all formulas, roots, or branches. ~# Show table of data for variable. nt = UNDEFINED Total costs-Tax variables: =Operating costs + Variable name (Total costs): ~*Javelin prompts you on the top line of the ~'screen for the name of the variable you ~%want to see. Press the SPELL key to s the list of existing variables: WAIT Total costs Sales Operating costs Initial investment Cash flow POSSIBILITIES READY ~$Select Operating costs by moving the ~)cursor to that variable and pressing WAIT costs + Initial invest Total costs} Operating costs MENU READY 1994 2003 1993 2002 1992 2001 2010 1991 2000 2009 1990 1999 2008 1989 1998 2007 1988 1997 2006 1987 1996 2005 1986 1995 2004 Operating costs = UNDEFINED ~&The top window changes to show you the ~&table for Operating costs. Now you can ~#enter the data for Operating costs. } $Costs are 200,000 in 1986. Type: ~.Operating costs = Yearly data: 1986 - 1986 ~ ... $200, WAIT Yearly data: READY Costs are 60,000 in 1987. Type: $60, WAIT READY ~'If you press in the Table view, you repeat the previous amount. ~$Press to repeat the value of 60, ~ for 1988: $60, WAIT READY ~*Press [Space] and I'll enter the operating costs for 1989 - 1992. $75, WAIT READY $95, WAIT READY $95, WAIT READY ~ ... $125, WAIT READY ~)You used the Table view to enter data for Operating costs. ~(Now use the Chart view to enter data for %Sales~!. To select the Chart view, type: /' $V' $C' DEFINE CLEAR VIEW WINDOW PRINT MENU Select view for current window. Graph Macro Errors Notes Worksheet Quick graph Chart Table Formulas ... Diagram VIEW Show table of data for variable ~$Show bar chart of data for variable. nt = UNDEFINED Total costs-Tax variables: 2003 2002 125,000 2001 . $95,000 2000 . $95,000 1999 . $75,000 1998 . $60,000 1997 . $60,000 1996 . 200,000 1995 . Operating costs = Yearly data: 1986 - 1992 ~ Variable name (Operating costs): Specify Sales by typing: 'sales READY 86 87 88 89 90 91 92 9 105 Sales = UNDEFINED ~&The top window changes to show you the chart for Sales. }#$Start by entering 100,000 for 1986. Type: 15000 45000 75000 ~$Sales = Yearly data: 1986 - 1986 WAIT Yearly data: 1986 - 198 READY ~%The Chart view shows a bar chart that ~'represents the value of Sales for 1986. ~#Now enter a value for 1987. Press to move to 1987: WAIT READY ~!Enter 250,000 for 1987 by typing: ~#graph now shows the value for 1987. ~$Use the cursor keys to draw bars for values through 1992. Sales increase in 1988. Press: '[PgUp] WAIT READY ~ Sales are steady in 1989. Press: WAIT READY Sales drop in 1990. Press: '[PgDn] WAIT READY ~$Sales decrease again in 1991. Press: '[PgDn] '[PgDn] WAIT READY ~&Sales continue to drop in 1992. Press: '[PgDn] WAIT READY ~$Now that you've entered the data for ~&Sales, only one variable is undefined. }&$The Formulas view in the bottom window ~'shows that the only remaining undefined variable is } %Initial investment~ }($This variable should have a single value ~*of $500,000. Instead of using the Table or ~(Chart view, you can enter the value of a constant with a formula. ~'Watch the top line of the screen as you ~(type the formula for Initial investment. ~$Use the SPELL key to help you. Type: & $i'n'i' $} WAIT Initial investment READY Finish the formula. Type: WAIT READY Initial investment=5 WAIT READY ~&The Chart view changes to show Initial ~#investment with a constant value of 500,000. }'$Look at the Formulas view in the bottom ~)window. All of the variables in the model are now defined. }"$Now it's time to get some answers. &Calculating the Model ~(If you try to view one of the calculated ~(variables at this point, you'll see that ~'it is not yet calculated. For example, look at the Table view for Tax. ~ To show the table for Tax, type: & $/' $V' $T' $t'a'x' $} DEFINE CLEAR VIEW WINDOW PRINT MENU Select view for current window. Graph Macro Errors Notes Worksheet Quick graph Chart Table Formulas ... Diagram VIEW ~$Show bar chart of data for variable. ~" Show table of data for variable. Total costs-Tax variables: Initial investment=5 ~#Variable name (Initial investment): READY NOT YET CALCULATED Tax=0.46*(Sales-Total costs) ~*The table for Tax shows that this variable i$s$ $} %NOT YET CALCULATED} ~'n the lower right corner of the screen ~*you see the CALC indicator. This means you ~&have to press the CALC key, [F9], to s ~#the values of calculated variables. Press the CALC key: '[F9] WAIT 1994 2003 1993 2002 1992 ~ ($1,380) 2001 2010 1991 $31,280 2000 2009 1990 $69,000 1999 2008 1989 $97,060 1998 2007 1988 ~ $103,960 1997 2006 1987 $87,400 1996 2005 1986 ($276,000) 1995 2004 READY ~'When you pressed the CALC key, Javelin: Calculated values for all the variables in the model. Showed the values for Tax in the top ~( window. (The values in parentheses are negative values.) Removed the CALC indicator from the $bottom line of the screen. &The Worksheet View ~*While you could look at the Table view for ~(each variable, it's much easier to see a ~#the results at once on a worksheet. Let's put a worksheet the top window. To ~*create a worksheet, use the View Worksheet command. Type: & $/' $V' $W' DEFINE CLEAR VIEW WINDOW PRINT MENU Select view for current window. Graph Macro Errors Notes Worksheet Quick graph Chart Table Formulas ... Diagram VIEW Show table of data for variable ~#Show a worksheet in current window. Total costs-Tax variables: 2003 2002 ($1,380) 2001 . $31,280 2000 . $69,000 1999 . $97,060 1998 . 103,960 1997 . $87,400 1996 . 276,000) 1995 . Tax=0.46*(Sales-Total costs) Worksheet name: Give the wo} $rksheet a name. Type: 'Results READY Results ~&Next, set up the worksheet to show the ~(results. Start by putting the dates 1986 ~#through 1992 across the top border. ~)First, press to move to the top border: Use the Border Dates command to fill in dates in the top border. (This command is one of * commands that are only available in the Worksheet view.) To use the Border Dates command, type: $ $ $ & $/' $*' $B' $D' DEFINE CLEAR VIEW WINDOW PRINT *WORKSHEET MENU Select view for current window. Format Sort ... Exception Name change Import file .. Range ... Border ... Data copy Copy *WORKSHEET Copy contents of cells. Shrink border Expand border Remove border Insert border Variable names Dates Border ... Enter dates in current border. ~ Format Sort ... Exception Name change Import file Range ... Border ... Data copy Copy Results READY Begin date (1986): ~2At the top line of the screen, Javelin prompts you ~/for a begin date. Press to choose the model default, 1986: End date (1992): ~0To select the default end date (1992), press again: WAIT READY WAIT READY ~0The top border now shows the dates 1986 to 1992. Finish setting up the worksheet by putting the names of the variables in the left border. To move to the left osts-Tax border, type: rly data: 1986 ~ $ $ $ 1986 - 1992 osts) osts + Initial ~ ~#Enter the name of a variable. Type: & $T'a'x' $} ($276,000) $87,400 $103,960 $97,060 WAIT READY Because values of Tax you entered earlier are part of the central ~%information base, these values appear ~#in the worksheet automatically when }%$you enter the name Tax in the border. ~$When you press [Space], I'll fill in ~%the rest of the variable names so you $can see the remaining values. WAIT ~ tal costs READY Total costs $700,000 $60,000 $60,000 $75,000 WAIT READY WAIT READY Sales $100,000 $250,000 $286,000 $286,000 $245, WAIT READY WAIT READY ~ Cash flow ($324,000) $102,600 $122,040 $113,940 WAIT READY ~ Cash flow ~"Look at the calculated results for ~#Cash flow on the bottom line of the ~#worksheet. The cash flow starts out negative in 1986, and is then positive between 1987 and 1990. ~%To see the values for the later years ~%of the investment, look at the end of worksheet. Press: '[End] ~)End: Press arrow key to select direction. WAIT ~ $103,960 $97,06 $69,00 31,28 ($1,380) ~ $122,040 $113,94 $81,00 $36,72 ($1,620) READY ~ Cash flow : Sales-Total costs-Tax ~#You can see that cash flow remains ~#positive through 1991, then becomes again by 1992. ~!Based on these figures, you might conclude that it would not be ~ profitable to continue using the factory addition after 1991. &Modifying the Model Overall, is the addition to the ~#factory a good investment? As often ~%happens, you have to modify the model to answer a specific question. ~ To determine whether or not the is worth expanding, define a ~$variable that totals cumulative cash flow over time. When in} $ a worksheet, you can enter a ~%formula by typing it in the worksheet border. ~%Before entering the new formula, move ~$he cursor to the row below Cash flow in the left border. Type: '[End] ~)End: Press arrow key to select direction. WAIT ($276,000) $87,40 $103,96 97,06 $69,000 ($324,000) $102,60 $122,04 $113,94 $81,000 READY ~ Cash flow: Sales-Total costs-Tax Name the new variable } %Cumulative } %cash flow~ . You can use the CUM ~!function to accumulate Cash flow. ~"Enter this formula with the aid of the SPELL key. Type: 'Cumulative cash flow=cum c'a's' $} WAIT CUM() READY Entering CUM(expression). WAIT Cash flow) READY Cumulative c #CALC #CALC #CALC #CALC #CALC WAIT ~%Total costs=Operating costs + Initial ax=0.46*(Sales-Total ~$Sales = Yearly data: 1986 - 1992 ~%Operating costs = Yearly data: 1986 Initial investment=5 ~#Cumulative cash flow=CUM(Cash flow) READY Cumulative cash flow To calculate the value} $s for Cumulative , press the CALC key: '[F9] WAIT ($324,000) ($221,400) + ~ ($99,360) $14,580 $95,580 READY ~"The first positive cash flow is in ~!1989. This is when the investment breaks even. ~!see the values of Cumulative cash flow for the later years of the investment, type: '[End] ~)End: Press arrow key to select direction. WAIT ~ $103,960 $97,06 $69,00 31,28 ($1,380) ~ $122,040 $113,94 $81,00 $36,72 ($1,620) ($99,36 ~ $14,580 $95,580 $132,30 $130,6 READY Cumulative cash flow : CUM(Cash flow) In 1992 Cumulative cash flow ~$decreases. Therefore, continuing the project after 1991 loses money. ~"Once you've built a model, you may want to save it for later use. ~"In Javelin, you would follow these $steps to save a file. Use the File Save command: $ $ & $/' $F' $S' DEFINE CLEAR WINDOW PRINT *WORKSHEET MENU ~"Commands specific to current view. Delete Import ... Save Load FILE Load a model file from disk. Save a model file to disk. $95,580 $81,000 $245,000 $95,000 $69,000 -1990 Results READY ~ Filename: Give the file a name: 'flow ~ Then press to save the file: WAIT flow.mdl READY flow.mdl saved. &Summary In this case study, you followed these steps to solve a problem: Set the model's period, time span, and format. Entered several formulas. Entered data in the Table and Chart views. Calculated the model. Displayed the results on a worksheet. Modified the model. Saved the model. Related case studie} }#%Constants and Time-series Variables~ shows how ~+to use constants and time-series variables. }$%Entering Data and Formatting Numbers~ explores ~'the different ways of entering data and formatting numbers. %Graphing with Javelin~ introduces you to ~,using Javelin's graphs, including bar graphs and pie charts.